12 TAXATION
(30424)
6147/09
COM(09) 28
| Draft Council Directive concerning mutual assistance for the recovery of claims
relating to taxes, duties and other measures
|
| Legal base |
Articles 93 and 94 EC; consultation; unanimity |
| Department | HM Treasury
|
| Basis of consideration |
Minister's letter of 23 November 2009 |
| Previous Committee Report |
HC 19-ix (2008-09), chapter 5 (4 March 2009) |
| To be discussed in Council
| 2 December 2009 |
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
12.1 Since there has been since 1976 a Directive,
the Recovery Directive, codified as 2008/55/EC, providing for
mutual assistance between Member States in the recovery of tax
debts and similar levies. This draft Directive would replace the
present Recovery Directive, in order to extend the scope and improve
mutual assistance between Member States in recovery of tax debts
and similar levies. The new Directive would:
- like the existing Directive, cover all types
of national taxes (direct and indirect), but extend the scope
to local taxes and social security (national insurance) contributions;
- clarify and simplify arrangements for the exchange
of information in connection with recovery assistance;
- introduce, in addition to exchange of information
on request, a requirement for spontaneous provision of information
concerning tax refunds made to residents of another Member State;
- provide for the presence and participation of
officials of one Member State in enquires in another Member State,
on condition that they act in accordance with the laws and administrative
provisions of the receiving Member State;
- simplify procedures for the service of documents
relevant to claims;
- introduce a uniform enforcement instrument, to
accompany information requests, in order to speed up the recovery
process and avoid the need for translation of national instruments;
- link the uniform enforcement instrument closely
to provisions on "precautionary measures", which build
on those in the existing Directive, to facilitate requests for
recovery of a claim at an early stage, before the debt has been
notified formally to the debtor in order, for example, to prevent
the debtor from disposing of his assets;
- extend the disclosure provisions of the existing
Directive to allow the sharing of information received with other
authorities within the Member State, as far as national law permits,
and to allow onward transmission of that information to a third
Member State without prior agreement, but in accordance with the
rules laid down in the Directive; and
- set out more extensively than the existing Directive
provisions for the recovery of costs.
12.2 When we considered this proposal, in March 2009,
we heard that
- the Government welcomed the draft Directive,
which would support Government objectives in tackling tax evasion
and avoidance;
- the proposed Directive should also enhance cooperation
between Member States and strengthen the Community's contribution
to tackling this global problem; and
- the Government wished to consider some aspects
of the proposal further, such as possible overlap with other Community
existing and proposed legislation, the extension to local authority
taxes and the impact of the provisions on precautionary measures
in the context of the UK legal and administrative framework.
We commented that the proposed Directive appeared
to offer improved intra-Community cooperation against tax evasion
and avoidance and we noted the Government's welcome for it. However,
before considering the documents further, we asked to hear the
outcome of the Government's examination of aspects of the draft
Directive to which our attention had been drawn. Meanwhile the
document remained under scrutiny.[35]
The Minister's letter
12.3 The Financial Secretary to the Treasury (Mr
Stephen Timms) writes now to tell us that there has been good
progress in Council Working Group discussions, where Member States
have been keen to ensure that the proposed Directive works in
practice and achieves its aim of an improved recovery ratio. Much
of the discussion has therefore focussed on detailed drafting
points and the need to ensure compatibility with national legal
frameworks and administrative practices. He says that:
- the provisions on "precautionary measures"
have been made more flexible to accommodate different approaches
at national level;
- the draft now excludes recovery of social security
contributions as this is already covered under the Social Security
Regulation, Regulation (EC) 883/2004 and the recently adopted
Implementing Regulation (EC) 987/2009);
- the draft has been strengthened in terms of its
provisions for data protection and confidentiality of information
exchanged; and
- the provision requiring Member States to use
the Directive to the exclusion of other bilateral or multilateral
agreements has been amended to allow Member States to use other
agreements where these may provide for a greater measure of assistance.
The Minister comments, about inclusion of local authority
taxes within the scope of the Directive, that local authorities
have generally welcomed the proposal although there are doubts
as to whether they will use it extensively, as compliance rates
for local taxes are generally high and debts are relatively small.
He adds that the main benefits of the Directive will be in respect
of national taxes, which are the main focus of the proposal.
12.4 The Minister says that in view of the progress
made under the Swedish Presidency the draft Directive is on the
agenda for ECOFIN on 2 December 2009 and the Presidency is expected
to seek agreement on a general approach.
Conclusion
12.5 We are grateful to the Minister for this
information on the points originally mentioned to us and for his
additional comments. We have no further questions and clear the
document.
35 See headnote. Back
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